Published: Tue, April 17, 2018
Hi-Tech | By Preston Stone

ZTE suspends trading on stock market following United States and UK bans

ZTE suspends trading on stock market following United States and UK bans

The U.S. ban comes after ZTE failed to adhere to an agreement made with the government after it pleaded guilty previous year to illegally shipping goods to Iran and North Korea and paid $1.19 billion million in fines.

As part of the agreement, Shenzhen-based ZTE promised to dismiss four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them, senior USA officials told Reuters.

The United States Department of Commerce (DOC) has just announced a ban on USA exports to ZTE, which means that the Chinese manufacturer will no longer be able to use technology or components from companies such as Dolby or Qualcomm, including the renowned Snapdragon processors. On top of the $892M monetary penalty, the settlement agreement put ZTE on "probation", with the company agreeing to forfeit their export privileges for seven years and paying the remaining $300M of the original $1.19B fine in case of a breach or further misconduct.

The Department of Commerce issued an order barring U.S. exports of sensitive technology to the Chinese company for seven years. ZTE, they say, has refused to discipline the employees responsible as per the agreement.

ZTE suspended trade on the Shenzhen and Hong Kong bourses on Tuesday as it became engulfed in the controversy.

ZTE agreed in March of a year ago to plead guilty and pay as much as $1.2 billion for violating US laws restricting sale of American technology to Iran.

The United States has cracked down on one of China's biggest tech companies, banning it from buying components from American firms.

Commonwealth Games officials apologise over 'disastrous' closing ceremony
In a series of Twitter posts Monday, Beattie said the ceremony had not worked out as organizers planned. NAN also reports that three Nigerians entered semi-final of 100m men while two of them got to final.

"ZTE misled the Department of Commerce", Ross said in a statement.

The U.K.'s national Cyber Security Centre warns the telecommunication companies of the country that, "National risks from ZTE equipment and services can not be mitigated".

The U.S. action could be catastrophic for ZTE since American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE's equipment, which includes smartphones and gear to build telecommunications networks.

The penalty is steep, given that USA companies are believed to provide more than a quarter of the components used in ZTE telecom equipment and mobile devices.

The sales ban came on the same day that it was revealed that the UK's National Cyber Security Centre (NCSC) has warned telecoms companies and other network operators of its "security concerns" with networking hardware made by Chinese vendor ZTE. ZTE has purchased chips from Qualcomm Inc.

ZTE's main business is networking equipment where they are a major player alongside other mentionable companies such as Nokia, Ericsson, Huawei and Cisco.

Shares of Finisar Corp. ZTE may have to either buy from a competitor or get chips from a Taiwanese company whose products generally lag those of its USA rival's in performance.

Like this: